View content available in

Big Oil: The EU’s not for moving

In our recent letter to the US Securities and Exchange Commission (SEC), we debunk flawed arguments by some oil companies that the US should weaken its transparency standard.[i] The oil companies are urging the SEC to move ahead as soon as possible so as to influence the parallel European law. However, the key elements of the European law are set in stone and there is no leeway for any European country to alter them, regardless of decisions made by the SEC.

Royal Dutch Shell plc, Exxon Mobil Corporation and Chevron Corporation are lobbying to weaken the US revenue transparency standard by using entirely erroneous arguments. In their letters to the SEC (linked above) they have suggested that the UK government will be able to change key aspects of the EU law as they implement it in the UK, and take into account decisions made in the US. The clear implication is that the US regulators should therefore not be afraid to issue US regulations that are weaker than EU ones. Global Witness campaigner Colin Tinto has previously described this line of argument as delusional, and our recent letter to the SEC details just how desperate and misguided these efforts are.

These arguments rest on a gross misunderstanding and misrepresentation of the legal and political processes in the European Union and the United Kingdom. As the UK government itself made clear, “the UK does not have the discretion to amend the requirements set out in the Directive” and the US process “does not have any legal effect on the European Directive.”

While the UK government is bound by the requirements of the EU directive and has no discretion to amend its terms, the US law leaves the SEC considerably more discretion (as was made clear in a court decision last year). A consistent global standard is in the interest of all stakeholders, and can only be achieved if the US reporting rule is consistent with the EU law. Global Witness therefore urges the SEC to exercise its discretion to align the US reporting rule with the EU requirements for project-level payment reporting without any exemptions.

Zorka Milin is a tax lawyer serving as a Yale Law School Peter and Patricia Gruber Fellow in Global Justice, and collaborating with Global Witness on advancing tax and revenue transparency in the extractive sectors.